partnering with spraying company, have some questions

Discussion in 'Business Operations' started by grass disaster, Mar 5, 2007.

  1. grass disaster

    grass disaster LawnSite Silver Member
    Messages: 2,776

    i ran into someone that has a opportunity for me

    he is looking for someone to service his spraying accounts.

    i am have been looking for someone that will do my spraying too. so this sounds like a good opportunity for both of us.

    i am solo part time and was quite busy last year. i work second shift monday thru thursday. so i mow from 7am to 1pm mon-thurs and all day friday. i could work sat too but i like sundays off

    this acquisition would require me to hire someone. i could hire my retired father if i choose.

    he has about 35 accounts for sale. some commercial some residential. he said that these are "very good accounts"
    what is the general asking price for these accounts??

    i am meeting with him tomorrow to go over some things.

    what are some other things i should be asking him or myself???? i want to be prepared when i go there!!!
  2. salandscape

    salandscape LawnSite Member
    Messages: 168

    I would expect to pay anywhere from 1/2 a season to a full season price for each account. Watch were he comes up with the numbers. If you are just buying lawn cut accounts make sure he isn't basing the # on his total gross sales.

    Look for a warranty against getting fired for issues out of your control, IE my nephew is going to do it for nothing, moved away etc.

    Make sure you have it in writing that you are not buying an preexisting issues, Joe was going to replace 10 shrubs that he killed, etc.

    Meet every one of the customers, which is time consuming and tedious, but you will get a feel for each of them.

    Make sure each account is worth what he currently charges. Get any info on contracts especially for the commercial. If this is his first season on a yearly contract I would be leery about pay a years gross for it!

    Have a lawyer look over the agreement.

    If he is looking to partner with you on the spraying he is probably on the up & up, but be smart and cover yourself!
  3. grass disaster

    grass disaster LawnSite Silver Member
    Messages: 2,776

    i'm not sure what you mean but paying a full season price. i don't plan on working for free my first year.

    he said he had someone lined up to do the mowing but that person just dropped out because they bought a nursery.

    he said he might drop some accounts if he can't find someone to do the mowing.
  4. cutbetterthanyou

    cutbetterthanyou LawnSite Bronze Member
    Messages: 1,178

    I bought out 25 lawns when i started. They cost 1 months wages and I had to buy his old front mount. It didn't work out to bad but i wouldn't pay more than 2-3 months wages. I don't care how good you are you will loose some of what you buy if they are residential (to many brother's friend, kid next doors, sisters boyfriends in the business) some people didn't even talk to me, or let me cut there yard one time before they dropped me. My advise is get it in writing a don't pay alot for them, but if the price is good go for it.
  5. supercuts

    supercuts LawnSite Silver Member
    Messages: 2,815

    am i missing something here, you have acccounts that need spraying, he has spraying accounts that need mowing, you give him the spraying, you take his mowing, nobody pays anything. i just teamed up with a guy last year the same way so i can avoid all the paper work/licences for spraying. you can do every aspect of landscaping but you will need a fortune for all the different equiptment you need. specialize in an area.

    i dont buy any accounts but if i did, i would never pay more than cost per mow,up to $50, for each account. paying a month wages is crazy, if your new and need lawns you probably need more equiptment too, dont put yoursefl in the hole the much. if this guy is taking your accounts and selling you his, he doesnt sound like a guy i would want a relationship with
  6. salandscape

    salandscape LawnSite Member
    Messages: 168

    IIf you have to buy them it is an investemt not an expense. You aren't working for free your first year, you are investing in your company. If you aren't buying the guys company, equipment name etc. you shouldn't be paying more than 3 month billing for it. I have done this in the past and borrowed the money to doit. I had it paid off in 4 months and doubled my business! Wow what an idiot I must be to pay a half a years wages to double my business and get a return on the investment in under 6 months. You have got to pay if you want to play boys.

    If you can double your business through straight marketing in one year great for you, but look at what that will cost you in money and time. It makes a hell of a lot more sense to pay it up front and take over some ones account IMO. But what do I know.

    If you are just trading services, have him do the spraying you bill it and take 10%. You do the mowing he bills it take 10%. problem solved. Personally I want 100% of the work i do.
  7. grass disaster

    grass disaster LawnSite Silver Member
    Messages: 2,776

    yes he would be doing my spraying i would be doing his mowing. thought about doing an even trade but he has more to offer me than i have to him.

    there are about 20-25 accounts $30-$35 each. accounts all in the same town. he will be keeping the 5-10 accounts out of town

    most are every week some are every other. like 2 are rough mow jobs

    agreements are he wants 10% of gross the first year. second year he wants 5%

    like wise if i get him spray accounts i would get 10% first and 5% second year

    what are some opinions on this???????? please help this is a big decision for me.
  8. salandscape

    salandscape LawnSite Member
    Messages: 168

    What does that amount to? For each, My thought is go for it, but don't kno wthe details, I would assume that you will get the addtional work that can come with mow accounts, you'll have these accounts for years to come (hopefully) and will make far more than your investment, so it is a good investment, that's how investments work! Addtionally you will make the percentages on the sprayer which is income you aren't getting now.

    I woul dhonestly rather pay for the accounts up front and sub the spray work to him for the forseeable future, he probably would go for that, but sent up an agreement for all future spray work you send his way for you to retain 5-10% indefinaltely. like a true subcontractor relationship.

    Again get it all in writing and at the very least notorized, preferably done by a lawyer.
  9. salandscape

    salandscape LawnSite Member
    Messages: 168

    Sorry I meant sub the spray work to him @ 10%, but he proably won't go that.
  10. grass disaster

    grass disaster LawnSite Silver Member
    Messages: 2,776

    now i just need some high school kid to help me

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